2 QuickBooks Profit-Volume-Cost Charts and Associated Data
This worksheet supplies chart data.
The data plotted in the following two charts came from the worksheet range shown here.
The break-even line chart
This line chart plots the total fixed costs, the total variable costs, and then the total sales. The intersection of the total sales line and the total fixed costs line shows the break-even point. By comparing the slopes of the total sales and the variable costs line, you can get an idea of how sensitive the profits are to changes in sales revenue.
If you have a good eye, you can even use the Break-even line chart to roughly estimate the profit at various revenue levels. To do this, find the point on the total sales line equal to the sales revenue level for which you want to guesstimate profits.
Then use the value axis (the vertical axis on the left side of the chart) to calibrate the difference between the total sales line and the total variable costs line. The difference between these two lines shows your profit or loss.
The total variable costs line actually shows the total variable costs plus the total fixed costs because it’s stacked on top of the fixed costs line.
The profit-volume-cost analysis area chart
This analysis is more complicated, so the chart is a bit trickier to interpret. Nevertheless, the chart resembles the Break-even line chart. Fixed costs appear as a solid band equal to $150,000 at the bottom of the graph. Variable costs appear as a sort of trapezoidal shape on top of the fixed costs.
Above those costs appear the costs that vary with profits and the actual profit. Note that profits occur only after the firm exceeds the break-even point. (The data labels on the horizontal axis represent the different volumes being tested.)